“Microsoft Corp.’s Zune device dropped to fifth place from second in the U.S. market for digital media players in its second week in stores, market researcher NPD Group Inc. said,” Dina Bass reports for Bloomberg.

Bass reports, “Zune captured 2.1 percent of the market in the week ended Nov. 25, said Stephen Baker, an analyst at Port Washington, New York-based NPD, in an interview today. Baker said Apple Computer Inc.’s iPod remained the leader, with 39.4 percent that week, based on units sold.”

Bass reports, “Zune’s market share declined as SanDisk Corp. boosted sales with a 50 percent price cut on its media players, taking a 39.3 percent share and knocking Microsoft from the No. 2 spot it occupied in its first week in the market. Redmond, Washington- based Microsoft sold about the same number of units as the previous week, failing to keep pace with rising holiday sales.”

“Baker said SanDisk typically cuts prices the week of the U.S. Thanksgiving holiday, taking more of the market from Apple than usual,” Bass reports.

“Zune took 9 percent share of units sold in its first week on the market, beating out SanDisk for second place after iPod in the week ended Nov. 18. Apple had a 63 percent share that week. ‘Second place for Zune is by no means a done deal,’ said Michael Gartenberg, an analyst at New York-based JupiterResearch,” Bass reports. “Creative Technology Ltd. was third, while Memorex International Inc. was fourth. Walt Disney Co. tied for fifth place with Microsoft. Overall unit sales rose 26 percent from the same week of last year, Baker said. NPD doesn’t disclose the number of units each company sold.”

“iPods led all manufacturers with 66 percent of dollars spent in the category, while SanDisk had 18 percent. The difference is explained by pricing–the average price of SanDisk players sold during the Black Friday week was $51, versus Apple’s $187, due to heavy promotional discounts offered by SanDisk,” Erica Ogg and Tom Krazit report for CNET News.

Ogg and Krazit report, “Apple ‘actually had a pretty good week,’ said Baker. ‘Considering SanDisk is out there giving stuff away, selling stuff for $29 or $39 dollars that would normally be $89 or $100 dollars.'”

Full article here.
All is proceeding pretty much exactly as we’ve been expecting all along. Redmond’s first week fake market share jubilation has been dashed all to hell with utter repudiation.

Note: Regarding the actual market share numbers for iPod, NPD does not report sales from Apple Retail Stores, the Apple Store online, Wal-Mart, or Amazon.com, which, as you might imagine, skews the iPod numbers wildly from week to week.

It mirrors human behavior. When oppressed people are down and out and at the bottom of the social pecking order, they put their energy into fighting each other for position, rather than uniting to fight the top dog.

SanDisk may emerge from all of this as the legitimate #2, and may get about 25% of the market from die-hard Apple haters who would rather cut off their own noses to spite Jobs and co.

I always look at the Sunday newspaper ad inserts to see how a product is advertised. Unfortunately for the Zune, they were onoly in the Circuit City ad as far as Electronics retailers go. They were in the Sears ad and the office supplies ads. Zune won;t sell many at Staple and Office depot. And the Circuit City and Sears ads did not advertise Zune on the first page. You don’t advertise what is not selling.